Mortgage – HousingWire |
- Agents fight misconceptions to win deals for military veteran clients
- Ocwen delivers a $21.5M profit in Q3
- Homepoint winds down Ginnie Mae loan-servicing business
- More borrowers are getting forbearance modifications
- Finance of America says reverse mortgages are ‘important’ to diverse product range
| Agents fight misconceptions to win deals for military veteran clients Posted: 08 Nov 2021 03:12 PM PST After completing countless Veterans Administration (VA) mortgage loan transactions over the years, Chris Pascoe, a Marine veteran turned RE/MAX agent, has developed something of a system. First, he has his clients lender call the listing agent. "This is an absolute must, especially in the market right now as it gives the lender an opportunity to fill the listing agent in on the buyer's background and how the VA loan process works," Pascoe explained. Next, he has his buyers write a letter to the seller, a practice that has come under scrutiny lately for creating potential biases. "I'd say there is a 50/50 chance of a letter having an impact on sellers, but when things are tough, it's worth a shot," Pascoe said. He will also inform the listing agent that he is a veteran himself and implores them to ask any questions or express concerns they have about VA loans. At the end of the day, Pascoe says the process is not all that different than purchasing a home with a conventional mortgage. But because inventory remains at record lows, home prices have soared to astonishing highs, and bidding wars still occur in housing market across the country, Pascoe and other real estate agents on the buy-side have had to go the extra mile to fight for their VA clients. Even under “normal” market conditions, VA buyers struggle to successfully purchase a home using their benefit. There remains a belief among listing agents and their clients that the VA appraisal and closing process will be a hassle. These beliefs are largely a relic of a different era, said Coldwell Banker agent Alison Winsom. "I think we have some outdated stories and some urban legend stuff around VA loans," said Wisnom, who is based out of Annapolis, Maryland, home of the U.S. Navy. "Somebody has a problem once and then that story just spread. A lot of the rules have relaxed over the past several years, but people always tend to remember the negative things so that is what has spread throughout the industry." A lot of the misconceptions about working with VA loans center on the VA appraisal process – which differs from conventional mortgage appraisals – as well as the time it will take for a transaction to close. VA loans are secured by the VA, and statutorily must be appraised by the VA and not just any appraiser. "I just closed two or three transactions with VA loans in 21 days, so you can't tell me that we can't close in under 30 days," said San Diego-based Compass agent Todd Armstrong. "But it isn't a misconception that the VA appraisal process is stricter, but if you are smart in your property selection and how you make your offer, it really isn't a big deal," said Armstrong. Unlike an appraisal for a conventional mortgage, VA appraisers can flag a wide variety of issues, from peeling paint to wobbly handrails and broken windows. "The book of things that they can flag is like 180 pages long, but so long as the house is relatively new, the condition of the house is not as big of a concern, but with older homes it can be really hard because there are so many unknowns with things that could get flagged," Becca Summers, a Keller Williams agent, said. Agents listing older or more rundown homes will frequently leave notes in the MLS saying that the home will not pass VA appraisal and therefore they are not accepting any VA offers. This, however, doesn't stop VA buyers from submitting an offer on the home. "We can still make an offer, but we know there’s a higher likelihood that the seller is not going to work with us before we even step foot in the house," Summers said. Some agents told HousingWire that some listing agents won't even look at VA offers, which is tantamount to discrimination, even if they believe they’re simply being fiduciaries to the sellers. "Occasionally I'll see a property and they'll put that it won't go FHA or VA and I'll look through the pictures be like, 'Why?'" Pascoe said. "After a closer look I might find something that is a super simple fix like a little bit of peeling paint, but by not fixing it and saying they won't take VA offers it is kind of as though they are automatically discriminating against veterans." Alex Naumovych, a loan officer at Draper & Kramer, has noticed similar trends in his work at a lender. "Often times I'll come in on a Monday and I'll have emails saying that clients put offers in on homes and had them accepted even though we didn't write up a pre-approval level," Naumovych said. "That never happens when a VA loan is involved. They'll just accept an offer with a conventional loan, but VA loans freak them out and they want more information even though it might be the strongest offer they receive." Although many listing agents do not want to work with VA loans, lenders, on the other hand, love them. "From a lending perspective they are the easiest loan to work with," Naumovych explained. "They have 100% financing, no mortgage insurance and there is no longer a loan limit and I am often able to give customers better interest rates even if they do not have a great credit score or their debt to income ratio is high. Other requirements for the transaction, like title insurance, are the same as for all other transactions, so it really isn't a big deal." While it can be challenging at times to complete a transaction with VA offer, many of the agents that spoke with HousingWire, know that it certainly can be done. Agents like Provo, Utah– based Summer have had success in getting their clients' VA offers accepted, even in this past summer's hot housing market, have developed a slew of strategies to make their client's offers more enticing to sellers. "One of the biggest concerns always is that appraisal is going to come in low, so in a super competitive market, if my buyers are able, I'll have them commit to paying $5,000 over appraisal if the appraisal comes in low," Summer said. "Terms are also really important. Some listing agents know that their property is priced too high and there is no way it will appraise for that much, so I'll talk to them and try and feel them out. Once you know where the listing agent is, you can structure the offer to cover their concerns. You just have to be aggressive with your offer." Wisnom also likes to feel out listing agents when working with a VA buyer and using offer terms to cater toward an individual seller's needs. "I'll call the listing agent and try to gage their familiarity with VA loans, so that I can fill in any gaps in their knowledge," she said. "I'll then try to have the VA buyer address some of the seller's priorities not just in terms of price, but, for example, I’ve had clients who had access to temporary lodging for a good amount of time and they were able to then give the seller flexibility on their move out. So it didn’t have to do with the price of the property, it had to do it with offering something else to the seller that was a benefit to them." Many real estate professionals that spoke with HousingWire believe that improved education is key to helping veterans have more success in using their hard-earned benefit. "Licensing exams and prep classes don't really dig deep into financing, so most of the education I have gained has come through working with lenders and VA buyers," Summers said. "One of the most important things for me to learn was what questions to ask the lender when getting a pre-approval letter because the information you need to have for a VA loan is different than for a conventional mortgage." Wisnom, who works with agents who are new to the VA loan space to educate them about the product and working with veterans in general, recommends the NAR's Military Relocation Professional Certification program as a good place to start. Armstrong agreed that the MRP certification is a good place to gain a basic understanding, but he and some of his colleagues have developed their own program, Fortitude, to help both agents and veterans improve their knowledge and understanding of VA loans. "We do a lot of seminars," Armstrong explained. "I do the real estate portion and I have my lender come in and do the VA loan portion. We work hard to get our buyer approved at the lowest rate and if they have credit problems we will put them in touch with the right people to get their credit restored. We really get down into the nitty gritty about how to use your VA loan to not only buy a home, but also use it as a way to build wealth." On the lending side of things Naumovych has had to learn a lot about VA loans, giving him a greater understanding of the product and how it compares to other types of loans. "The average Realtor does not know a lot about VA loans because they don't work with them very often," Naumovych said. "More education is really the only way to improve this situation." The post Agents fight misconceptions to win deals for military veteran clients appeared first on HousingWire.  |
| Ocwen delivers a $21.5M profit in Q3 Posted: 08 Nov 2021 01:49 PM PST Nonbank mortgage lender and originator Ocwen Financial Corporation generated a $21.5 million profit in the third quarter, reversing the $9.4 million loss in the same period of 2020. In the previous quarter, the company had reported a loss of $10.3 million. Total revenues increased 13% year-over-year to $282.1 million. Meanwhile, operating expenses declined 2.74% to $145.4 million. Other income and expenses went from $77 million to $121 million in the same period. Glen Messina, president and CEO of Ocwen, said the financial performance exceeded the company's expectations and resulted from strong originations, solid operational execution, and continued focus on cost reduction. The return on equity was 19% in the third quarter, compared to a negative return of 9% one year before. The total servicing portfolio increased 38% between the third quarter of 2020 and 2021, to $248 billion in total. Origination volume grew 61% year-over-year to $667 million in the third quarter. Reverse origination, however, went from $230 million in the third quarter of 2020 to $428 million in the same period of 2021. The company said the Reverse Mortgage Solutions reverse servicing platform acquisition was completed in October. Ocwen is investing in a multi-channel origination platform. In the direct consumer channel, volumes were up 61% year-over-year. The correspondent channel grew 179%, mainly because the Texas Capital Bank lending business is integrated. In April, Ocwen announced it acquired the entire $14 billion book of mortgage servicing rights of Texas Capital Bank through its subsidiary PHH Mortgage. In total, the deal added 200 new correspondent sellers and 60,000 loans to PHH's business. According to Messina, the multi-channel platform has delivered more than $100 billion in new servicing over the past three quarters. "We are focused on maintaining our profitable growth momentum by expanding our addressable markets through new products and services and continued client expansion," said Messina. The post Ocwen delivers a $21.5M profit in Q3 appeared first on HousingWire.  |
| Homepoint winds down Ginnie Mae loan-servicing business Posted: 08 Nov 2021 01:41 PM PST  Mortgage lender Home Point Financial, which does business as Homepoint, is poised to exit the Ginnie Mae mortgage-servicing rights market, according to its CEO and filings with the Securities and Exchange Commission. Homepoint, in an SEC filing in early November, revealed that its third-quarter financials were boosted by $122 million earned on the sale of mortgage-servicing rights, or MSRs, for an $11 billion portfolio of single-family mortgages "serviced for the Government National Mortgage Association," or Ginnie Mae. In a separate SEC filing made in September, the lender revealed that the $11 billion portfolio represented about 41% percent of Homepoint's "total Ginnie Mae mortgage-servicing portfolio as of June 30" — a percentage also confirmed by the lender's chief financial officer, Mark Elbaum. The buyer for that $11 billion MSR portfolio, according to the September SEC filing, was Freedom Mortgage Corp. Homepoint, the third largest nonbank wholesale lender nationally, per Fitch Ratings, posted a $73 million loss for the second quarter ended June 30. The $122 million earned on the third-quarter sale of the $11 billion Ginnie Mae MSR portfolio, however, helped to boost Homepoint and its parent, Michigan-based Home Point Capital Inc., into the black for the third quarter of this year, with the lender reporting a Q3 profit of $71 million. "The [MSR] transaction further streamlined Home Point's servicing operations, reduced overall portfolio delinquencies, and provided incremental liquidity which was used to reduce outstanding debt," the company's November SEC filing states. Ginnie Mae backs only the securities issued against mortgages that are in turn guaranteed by the Federal Housing Administration, a go-to program for many first-time homebuyers; the Department of Veterans Affairs; the Department of Rural Housing Service; and HUD's Office of Public and Indian Housing. Homepoint spokesperson Brad Pettiford declined to comment on the lender's plans for its remaining Ginnie Mae MSR holdings beyond what is in public filings.  This content is exclusively for HW+ members.Start an HW+ Membership now for less than $1 a day.Your HW+ Membership includes: Already a member? log in The post Homepoint winds down Ginnie Mae loan-servicing business appeared first on HousingWire.  |
| More borrowers are getting forbearance modifications Posted: 08 Nov 2021 01:00 PM PST Forbearance predictably declined across the board last week as exits accelerated, but more borrowers are going into plan modifications because they are still struggling to recover their pre-pandemic income. The total number of loans in forbearance decreased by nine basis points to 2.06% as of Oct. 31, according to the latest report from the Mortgage Bankers Association (MBA). In the previous week, the rate dropped six basis points to 2.15%. Just over one million homeowners are still in forbearance plans. The survey included data on 36.6 million loans serviced as of Oct. 31, 73% of the first-mortgage servicing market. This is the last MBA's weekly survey, as the trade group is moving to a monthly report. Fannie Mae and Freddie Mac loans in forbearance declined five basis points to 0.92%. Meanwhile, Ginnie Mae loans decreased by 13 bps to 2.52% The most notable decline was in the independent mortgage bank portfolio, which dipped 15 basis points to 2.28%. The share of private-label securities (PLS) loans in forbearance fell 13 basis points to 5%. For depository servicers, the percentage declined 5 bps to 2.02%. According to Mike Fratantoni, the MBA's senior vice-president and chief economist, more borrowers exiting plans in the last week of October went into modification, "a sign that they have not yet regained their pre-pandemic level of income." "The strong job market report from October, with another drop in the unemployment rate and a pickup in wage growth, is a positive sign for homeowners still struggling to get back on their feet," he added. The survey shows that 15.8% of total loans in forbearance were in the initial stage last week, and 73.9% were in a forbearance extension. The remaining 10.3% were re-entries. Weekly call volume for servicers was up, from 5.9% of the servicing portfolio volume the week prior to 6.5%. During the last 15 months, MBA's data revealed that 29.1% of exits resulted in a loan deferral or partial claim. Also, 20.4% represented borrowers who continued to pay during the forbearance period. However, 16.7% were borrowers who did not make their monthly payments and did not have a loss mitigation plan. In addition, 13.4% resulted in a loan modification or a trial loan modification, compared to 13.1% in the previous week. Total requests were at 0.04% of servicing portfolio volume, while exits represented 0.17% of the total – in the previous week, the share was 0.09%, the report said. The post More borrowers are getting forbearance modifications appeared first on HousingWire.  |
| Finance of America says reverse mortgages are ‘important’ to diverse product range Posted: 08 Nov 2021 11:52 AM PST While the total number of reverse mortgage industry professionals present at HW Annual in Frisco, Tex. this past September was minimal in comparison with the numbers of forward mortgage lenders and vendors, one C-level executive of a major mortgage company devoted some of her time on a panel at the event to discussing the importance of reverse mortgages to a fully and diverse product suite. Kathryn Amor, chief product officer at Finance of America Companies, spoke during the event's mortgage purchase market panel about what Finance of America Reverse (FAR) brings to the table for the larger parent company. To dive deeper into the relationship between FAR and its parent company, RMD sat down with Amor to get a better idea of what the reverse mortgage division and its products bring to the proverbial table of the larger organization. An 'important' component to product diversity, smaller does not always mean 'niche'When asked specifically what reverse adds to the larger Finance of America organization, Amor described a product category with a unique feature set that allows the larger company to demonstrate how comprehensive it can be as a provider of different kinds of mortgage solutions. "Reverse mortgages are an important product within Finance of America's diverse range of flexible, end-to-end consumer lending solutions spanning the entire home financing and home equity spectrum," she explains. "They complement offerings at our Finance of America Mortgage and Finance of America Commercial businesses and, more broadly through Finance of America Reverse, bring increasingly important and flexible alternative financing options to our discussions with customers along their financial journeys." Part of the reason that the company remains committed to reverse is because of demographic and borrower trends, and both of these components indicate to FOA that reverse mortgages are not only potentially effective for seniors, but they're also uniquely suited to meet the needs of seniors who continue to face a retirement funding crisis.  "We look at market dynamics and lending through a long lens and aim to develop and deliver innovative products that we believe meet an evolving set of consumer financing needs at various stages of life and throughout changing economic cycles and borrowing conditions," she says. "Our belief is that as interest rates rise, borrowing will get more difficult and expensive, limiting many consumers' access to financing. Our aim at Finance of America is to be a trusted, reliable partner to consumers who is always available to them regardless of market conditions to provide suitable products and sound counsel that meets their specific needs." Amor is also quick to point out that smaller reverse mortgage volume figures in comparison to the forward side does not necessarily mean that reverse mortgages are a "niche" product offering, while also offering that a desire to be comprehensive in the mortgage lending space necessitates having a reverse offering of some kind. "Reverse mortgages have been part of our lending solutions toolkit since our founding," she says. "And in our opinion, no balanced product strategy is complete without it. Reverse mortgages are a key component of our diversification and a critical product offering that helps us provide customers with a more complete set of financing alternatives. I guess you can say reverse is in our DNA." Reverse mortgages and the purchase marketWhen it comes to serving any mortgage customer at or over the age of 55, Amor says that leaving out a reverse mortgage option of any kind has the potential to make for an incomplete process. Whether through FHA-backed or proprietary loan options, the amount of features available with both products have the potential to meet the needs of seniors more efficiently than strictly forward-facing mortgage options. "Finance of America Reverse offers innovative solutions that our industry needs to help older Americans fulfill their retirement dreams through the sound use of home equity to finance their non-working years," she says. "FAR is a leader in reverse mortgage product innovation and employs a thoughtful mix of ingenuity, technology and education to develop and deliver retirement solutions well in advance of market needs." Older homeowners who may be looking for a new home may also run into the roadblocks that accompany the cohort's collective financial difficulties, but reverse mortgage product options may present a solution for homeowners who find themselves in that situation, she says. "We know that many aging homeowners haven't saved enough to have financial flexibility in retirement and are carrying tremendous amounts of debt, which is making their ability to secure financing through traditional products very difficult and expensive," she says. "At the same time the equity in their homes continues to grow. Reverse mortgages are an eloquent, alternative way to tap into that equity and provide many seniors with financing to be able to retire in their home." Product education and the necessity to connectStill, echoing the concerns of many in the reverse mortgage industry, Amor points out the ongoing issues related to product awareness and borrower education of reverse mortgage products and obligations. "One of the biggest gating factors between older Americans and financial flexibility in retirement is awareness of reverse mortgages and an understanding that it is a safe, sound financing tool," she says. "This is why education is the centerpiece of FAR's mission. People have not been made fully aware of all the flexible options including reverse mortgages, that are available to today's modern borrower or they have preconceived notions based on dated or wrong information about legacy reverse mortgage industry products." This extends to a lack of awareness around reverse mortgage options which are not backed by FHA, such as proprietary reverse mortgage products offered by FAR and other major lenders. One of the ways that FOA hopes to change that is through the availability of the hybrid forward-reverse product offering, EquityAvail, announced earlier this year. "It is a first-of-its-kind hybrid product that combines aspects of traditional and reverse mortgages to deliver greater optionality for homeowners at or near retirement – which we refer to as 'pre-tirement' – and helps improve cash flow and financial stability while better preparing them to handle unexpected expenses," she says. In terms of ways in which the company and the broader reverse mortgage industry can address concerns related to education and the proliferation of accurate product information, Amor describes the necessity to keep up national efforts to broaden consumers' knowledgebase around lending later in life. "This is a critical time in our history, where a holistic approach to retirement planning and access to alternative financing products that leverage the responsible use of home equity are a necessary complement to existing retirement efforts, especially if we intend to adequately support the growing segment of individuals at or near retirement age," she says. "Whether rising costs of health care, our lengthening lifespans, or shrinking benefit plans like pensions, many Americans simply do not have enough money to afford retirement." Look for additional perspective from Kathryn Amor soon. The post Finance of America says reverse mortgages are 'important' to diverse product range appeared first on HousingWire.  |
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